Tuesday, 13 September 2016

Patent litigation and damages in the US: cause for migration?

The Final Report of the Berkeley Center for Law & Technology Patent Damages Workshop (UC Berkeley Public Law Research Paper No. 2823658) has been written up for publication in a forthcoming issue of the Texas Intellectual Property Law Journal. If you don't see that journal and can't wait to get your hands on the report, the good news is that you can access it via the increasingly invaluable Social Science Research Network -- better known by its initials SSRN, here.

Put together by Stuart J. H. Graham (Georgia Institute of Technology, Scheller College of Business), Peter S. Menell (University of California, Berkeley, School of Law), Carl Shapiro (University of California, Berkeley, Haas School of Business) and Timothy Simcoe (Boston University, Questrom School of Business; NBER), the Final Report is a commendably succinct 22 page document. According to its abstract:
The determination of patent damages lies at the heart of patent law and policy [it does, if you are calculating whether it's worth suing for damages or settling a claim -- but patent law and policy have more than one heart: for others, it's issues of patent-eligibility.  Others focus on cost, patent quality or scope of protection], yet it remains one of the most contentious topics in this field, particularly as regards the calculation of a reasonable royalty [it seems that, in the US, it's patent damages that influence calculation of a reasonable royalty while, in other countries where licensing is more prevalent than court-awarded damages, it's reasonable royalty rates that influence patent infringement awards]. 
In March 2016, the Berkeley Center for Law & Technology convened a workshop of leading “insiders” (in-house counsel, litigators (from both the assertion and defense sides), patent licensing professionals, and testifying expert witnesses) and academics (both law professors and economists) to clarify areas of consensus and disagreement regarding the treatment of patent damages [the participants and the discussion were almost exclusively US-oriented, even though companies such as Apple, Microsoft and IBM have extensive experience of patent damages issues on a far wider basis]. This report summarizes the discussion, key findings, and ramifications for patent case management.
It is no secret that the scale of patent infringement litigation in the United States appears to have dipped since its peak in 2013.  Many reasons have been offered for this and it may be only with the benefit of hindsight that we can truly appreciate the impact (or otherwise) of each of them.  

No-one has yet seriously suggested that the dip in US-based patent infringement litigation may be reflected by the settlement of multi-jurisdictional patent disputes in jurisdictions outside the US and, at present, it seems unlikely that this factor is playing a significant part in drawing disputes towards the calmer waters of Western Europe or to some of the more sophisticated jurisdictions within the Asia-Pacific region.  It may however be worth watching for the development of an incipient trend if complaints regarding the efficacy of the US patent system and the closely-scrutinised decisions of its courts begin to take a toll.

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